CO129-503-2 Tenure of new territories in view of Chinese situation 19-1-1927 - 8-8-1928 — Page 7

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now remaining.

Moreover, as the years go by,

the period left of the lease from China becomes

smaller and smaller, and it will become

increasingly difficult to get development

undertaken in private hands;

(b) "he second point was that the period for

which a lease is granted cannot be kept secret.

If, therefore, we only grant leases for the

unexpired period of the lease from China, it

will become generally known that this is our

policy, and the inference will be drawn that we

propose eventually to restore the New Territories

¡ to China. This would create an atmosphere of

uncertainty and dismay and eventually put a

stopper on development in the leased area.

Some discussion ensued as to whether

or not this was an appropriate time to raise the

question at home. It seemed clear that it

would have to be submitted to the Cabinet, and

it was doubtful whether the Cabinet would be

prepared to authorise action which might conflict

with the legal advice tendered to them. On the

other hand it was felt that a case could be made

on the political side, and even if this case did

not find favour with the Cabinet, Hong Kong would

be no worse off than it is now. We cannot,

therefore, lose anything by raising the question,

and we may possibly gain an important decision

in our favour. It was decided that if this

course met with general agreement we should

prepare a Cabinet Demorandum based on the telegrams

exchanged with Hong Kong in 1926, conveying an

assurance to the Governor that we would be in no

circumstances